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Facts
The assessee filed a registration application under Section 12AB of the Income Tax Act. The CIT(Exemption) rejected the application based solely on the Assessing Officer's recommendation without assigning proper reasons.
Held
The tribunal held that the CIT(Exemption) failed to apply its own mind and did not provide the assessee an opportunity to be heard, violating principles of natural justice. The order was set aside, and the issue was restored for fresh adjudication.
Key Issues
Whether the CIT(Exemption) passed a non-speaking order and rejected the application without affording natural justice to the assessee.
Sections Cited
12AB
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Income Tax Appellate Tribunal, ‘A’ BENCH, BANGALORE
Before: SHRI NARENDER KUMAR CHODHRY & SHRI WASEEM AHMED
PER WASEEM AHMED, ACCOUNTANT MEMBER:
This is an appeal filed by the assessee against the order passed by the CIT(A)-11, Bengaluru vide order dated 24/03/2025 in DIN No.ITBA/EXM/F/EXM45/2024-25/1074935502(1).
At the outset, it is noted that the registration application filed by the assessee under section 12AB of the Act in Form No. 10AB dated 17 September 2024 has been rejected by the learned CIT(Exemption) without assigning any proper reasons. The impugned order is a non- speaking order.
The reason given for rejection by the learned CIT(Exemption) is only the recommendation of the jurisdictional Assessing Officer. Merely on the basis of the report of the Assessing Officer, the application has been rejected.
In our considered view, the approach adopted by the learned CIT(Exemption) is not proper and not sustainable in law. The learned CIT(Exemption) is required to apply his own mind before taking any decision against the assessee. He cannot mechanically rely only on the recommendation of the Assessing Officer.
4.1 Furthermore, before rejecting the application of the assessee, it is imperative upon the learned CIT(Exemption) to grant an opportunity of being heard to the assessee. This is a basic requirement under the principles of natural justice as well as the provisions of section 12AB of the Act.
4.2 Accordingly, in the interest of justice and fair play, we set aside the impugned order and restore the issue to the file of the learned CIT(Exemption) for fresh adjudication as per law. The learned CIT(Exemption) shall examine the application independently, provide proper opportunity of being heard to the assessee, and then pass a reasoned order.
4.3 It is needless to mention that the assessee shall cooperate during the proceedings and shall avoid unnecessary adjournments.
In the result, the ground of appeal of the assessee is allowed for statistical purposes.
Order pronounced in court on 9th day of October, 2025